77 Water St., Inc. v. JTC Painting & Decorating Corp.

• Decision Date: 29 March 2017
• Docket Number: 2015-07601, Index No. 12671/10.
• Parties: 77 WATER STREET, INC., et al., appellants, v. JTC PAINTING & DECORATING CORP., et al., respondents, et al., defendant.
• Court: New York Supreme Court — Appellate Division

148 A.D.3d 1092

50 N.Y.S.3d 471

77 WATER STREET, INC., et al., appellants,

v.JTC PAINTING & DECORATING CORP., et al., respondents, et al., defendant.

2015-07601, Index No. 12671/10.

Supreme Court, Appellate Division, Second Department, New York.

March 29, 2017.

Barry, McTiernan & Moore, LLC, New York, NY (Laurel A. Wedinger of counsel), for appellants.

Newman Myers Kreines Gross Harris, P.C., New York, NY (Olivia M. Gross and Luis G. Sabillon of counsel), for respondents.

WILLIAM F. MASTRO, J.P., RUTH C. BALKIN, JEFFREY A. COHEN, and VALERIE BRATHWAITE NELSON, JJ.

Appeal by the plaintiffs from an order of the Supreme Court, Kings County (Bernadette Bayne, J.), dated May 13, 2015. The order denied the plaintiffs' motion for summary judgment declaring, inter alia, that the defendants JTC Painting & Decorating Corp. and Allied World Assurance Company are obligated to defend and indemnify the plaintiffs herein in an underlying action entitled Muhaj v. 77 Water Street, Inc., pending in the Supreme Court, Kings County, under Index No. 847/10, or, in the alternative, in effect, that the defendant JTC Painting & Decorating Corp. is obligated to procure insurance coverage for these plaintiffs in the underlying action, and granted the cross motion of the defendants JTC Painting & Decorating Corp. and Allied World Assurance Company, inter alia, for summary judgment declaring that the defendant Allied World Assurance Company is not obligated to defend or indemnify these plaintiffs in the underlying action, and that the defendant JTC Painting & Decorating Corp. satisfied any contractual obligation it had to procure insurance coverage for these plaintiffs.

ORDERED that the order is modified, on the law, (1) by deleting the provision thereof denying that branch of the plaintiffs' motion which was for summary judgment declaring that the defendant Allied World Assurance Company is obligated to defend and indemnify the plaintiff Structure Tone, Inc., in an underlying action entitled Muhaj v. 77 Water Street, Inc., pending in the Supreme Court, Kings County, under Index No. 847/10, and substituting therefor a provision granting that branch of the plaintiffs' motion, and (2) by deleting the provision thereof granting that branch of the cross motion of the defendants JTC Painting & Decorating Corp. and Allied World Assurance Company which was for summary judgment declaring that the defendant Allied World Assurance Company is not obligated to defend or indemnify the plaintiffs herein in the underlying action, and substituting therefor a provision denying that branch of the cross motion; as so modified, the order is affirmed, without costs or disbursements, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment in accordance herewith.

In an underlying action entitled Muhjaj v. 77 Water Street, Inc., which is pending in the Supreme Court, Kings County, under Index No. 847/10, the plaintiff therein is seeking damages from 77 Water Street, Inc. (hereinafter 77 Water Street), and Structure Tone, Inc. (hereinafter Structure Tone), for alleged injuries that occurred on October 26, 2009, when he allegedly slipped on debris at a renovation site and fell. On the date of the accident, the plaintiff in the underlying action was employed as a painter by JTC Painting & Decorating Corp. (hereinafter JTC). The complaint in the underlying action alleges that JTC had entered into a subcontract with Structure Tone, which was the general contractor or construction manager, to perform work at the renovation site, and that 77 Water Street was the owner of the property.

Structure Tone and 77 Water Street (hereinafter together the plaintiffs) commenced the instant action seeking a judgment declaring that Allied World Assurance Company (hereinafter Allied), JTC's commercial general liability insurer, is obligated to defend and indemnify them in the underlying action as additional insureds under a commercial general liability policy that Allied issued to JTC. The policy contained an endorsement entitled "Additional Insured–Owners, Lessees or Contractors–Scheduled Person or Organization" (hereinafter the endorsement), which amended the definition of "who is insured" under the policy to include entities "[a]s required by written contract" with JTC. In the alternative, the plaintiffs sought, in effect, a judgment declaring that JTC is obligated to provide insurance coverage to the plaintiffs, having breached its contractual obligation to obtain certain policies of insurance naming them as additional insureds.

The plaintiffs moved for summary judgment, in effect, making the declarations sought in the complaint, contending that JTC and Structure Tone had entered into two written contracts, a blanket insurance/indemnity agreement and an unsigned purchase order, wherein JTC agreed to procure comprehensive general liability insurance and to name Structure Tone and 77 Water Street as additional insureds on the policy. The blanket insurance/indemnity agreement is dated June 24, 2004, and the purchase order is dated October 29, 2009. JTC and Allied cross-moved, inter alia, for summary judgment declaring that Allied is not obligated to defend or indemnify the plaintiffs in the underlying action, and that JTC satisfied any contractual obligation it had to procure insurance coverage for the plaintiffs. They contended, among other things, that the plaintiffs were barred by the doctrine of collateral estoppel from asserting that JTC had agreed in a written contract to name them as additional insureds on its insurance policy. In support, they submitted proof that the plaintiffs had asserted a third-party cause of action for contractual defense and indemnification against JTC in the underlying action, and that JTC had been granted summary judgment in the underlying action dismissing that cause of action on the ground that no written contract existed between JTC and either of the plaintiffs on the date of the accident.

The Supreme Court held that the plaintiffs were collaterally estopped from contending that a written contract existed between them and JTC on the date of the accident that required JTC to procure comprehensive general liability insurance and to name them as additional insureds on the policy. As a result, the Supreme Court denied the plaintiffs' motion for summary judgment, and granted the cross motion of JTC and Allied, inter alia, for summary judgment, concluding that JTC and Allied were entitled to a judgment declaring that Allied was not obligated to defend or indemnify either of the plaintiffs in the underlying action. The plaintiffs appeal.

" ‘The doctrine of collateral estoppel bars relitigation of an issue which has necessarily been decided in a prior action and is determinative of the issues disputed in the present action, provided that...